A GOP aide with knowledge of the negotiations says Budget talks ended around 3a.m. at an impasse largely over the size of cuts and their composition. The aide says while it can still be said nothing is agreed to until everything is agreed to, there has been some narrowing on the so-called riders, but there has not been much movement on the cuts. The Republican source says Democrats last night essentially wouldn't consider or work off of anything above their level of cuts, and Republicans say that is a problem.

Talks are expected to resume at 8a.m. this morning.

House Speaker John Boehner and Senate Majority Leader Harry Reid held two meetings with the President on Thursday at the White House including another night session.

After that meeting, President Obama issued some cautious optimism.

"[I]'m not yet prepared to express wild optimism. But I think we are further along today than we were yesterday," Obama said.

The president said he expects an update in this morning.  An official close to the talks says Boehner-Reid call will go to Obama "when there's progress to report rather than an arbitrary time."

Mike Emanuel currently serves as chief congressional correspondent for FOX News Channel (FNC). He joined FNC in 1997 as a Los Angeles-based correspondent.